Third Party Liability

The Third Party Liability unit (TPL) identifies Medicaid recipients who have other medical insurance making Medicaid payer of last resort. These third-party sources include, but are not limited to, health and liability insurance, court settlements, workers compensation and absent parents.

Individuals eligible for Medicaid assign their rights to third-party payments to the state Medicaid agency. Once the state has determined that a potentially liable third party exists, it is required either to cost avoid or pay and chase claims.

Cost avoidance is where the provider of services bills and collects from liable third parties before sending a claim to Medicaid. Pay and chase is used when the state Medicaid program pays the medical bills and then attempts to recover from liable third parties.